Cashflow Modelling
Cashflow modelling helps assess whether your income is likely to remain sustainable over the long term—giving you a clear picture of how your finances may unfold and the confidence that your plans are built to last.
What is Cashflow Modelling?
Cashflow modelling is a financial planning tool that projects your income, expenditure, assets and liabilities over time. It helps answer key questions like:
- Will I have enough money to retire?
- How long will my pension last?
- Can I afford to gift money or take that dream holiday?
By using realistic assumptions about investment growth, inflation, tax and lifestyle costs, cashflow modelling creates a visual plan for your financial future. It allows you to see how your wealth changes over time and helps you make more informed decisions with confidence.
Income Throughout Retirement
The chart below provides an example of how income might be structured over retirement:
- Current Salary (purple) continues up to retirement.
- State Pension (yellow) begins at state pension age and runs for life.
- Annuity (green) adds guaranteed income, if purchased.
- Pension Drawdown (blue) offers flexible withdrawals from pension savings.
- Target Income (black line) represents the desired annual income, adjusted for inflation.
The model demonstrates how different income sources can work together to meet your retirement needs, maintain a steady income, and adapt over time.
How the Pension Fund Is Used
This second chart shows how a drawdown pension fund might reduce over time as income is taken:
- Each bar represents the remaining value of the pension pot at a given age.
- The pension value increases up to the retirement age.
- Between retirement age and state pension age, the pension value declines at a faster rate as a higher amount is withdrawn to meet the income target.
- From state pension age, the decline steadies to reflect the reduced withdrawals needed to fund retirement.
- All values are shown after inflation, giving a clearer picture of real value.
This kind of modelling helps ensure your withdrawal strategy is sustainable and aligned with your long-term goals.
Ready to Explore Your Own Plan?
Everyone’s retirement journey is different. These examples are purely illustrative – your own model will be tailored to your goals, assets, income needs and lifestyle.
If you'd like to see what your retirement could look like, get in touch for a personal cashflow modelling session. It’s a great way to get clarity, take control, and plan with peace of mind.
Oliver Financial Planning
98 Bay Tree Rd, Bath BA1 6NF, UK
Oliver Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority. Financial services reference number: 963900.
Our company number is: 13205258. Registered office address: 30 Circus Mews, Bath, BA1 2PW.
Investment Risk Warnings
All investments carry an element of risk, and the value of your investments can go down as well as up, so you could get back less than you invested.
A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of fund when accessed, interest rates and legislation.
A Protection plan will have no cash in value at any time, and will cease at the end of the term. If premiums are not maintained, then cover will lapse and you may not be covered if a claim is made
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